Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
During 2022, we’ve had one short squeeze after another.
For 2023, it could be forced liquidation in the relentless squeeze for cash.
One corporate example of the squeeze is the announcement from CarMax; they’ve suspended their stock buybacks.
This ‘buy-back halt’, theme, needs to be added to the market strategy for the coming year.
We can put that on the list right along with skipped dividends, power outages, market outages, internet cyber-attack and supply chain disruptions.
A comment below, posted in yesterday’s update from Jerrimiah Babe, opines the typical consumer’s going to carry on unabated, until the very last minute.
“I don’t believe most people will stop spending until all access to credit is exhausted. Whether it be cards, after-pay, family, theft most will continue to keep up appearances. I honestly think most could be 2 months behind on their mortgage or rent and still be spending on crap. There’s no financial responsibility or discipline anymore.”
How that may translate to the mainstream is, they continue to report ‘the consumer is strong’ until instantly, overnight, they’re not.
Possible timing for that event may be late January, or mid-February (not advice, not a recommendation).
With all that in mind, the last post identified Netflix and Target, as potential candidates for significant downside opportunity.
‘Significant’, meaning a 50% to 90% decline from current levels (not advice, not a recommendation).
Target TGT, Yearly
The year is just about over so let’s start with a very long-term view.
Two things have happened over the past three-years.
Price action has met a measured move out of the wedge as shown; then, a massive downward thrust.
It’s important to note, this year’s down-thrust, dwarfs the previous one during the -64.7%, decline of ’07 – ’09.
There’s a band of support that’s at least nine-years wide, in the vicinity of 50 – 75.
We’ll discuss that in another update.
Netflix NFLX, Yearly
Technically, Netflix is worse than target. That is, it has the potential to decline farther and faster.
NFLX, has support as well but comparatively minor in the area of 50.
It does not become significant until the wedge (blue lines) in the vicinity of 5 – 10.
With Netflix’s ‘product’ being completely discretionary, it’s ultimate downside potential, from a fundamental standpoint, surpasses that of Target.
Summary
Time permitting, shorter timeframes will be presented.
However, since the primary focus of this site, is first on ‘strategy’ (think dollar rally), we’re interested in the larger timeframes.
That in turn, provides background to drill down further for any trade decisions (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
As a digression; in Texas, we’re just now coming out of yet another record-breaking cold spell.
That’s two, never before seen record breaking low temp events within the past three years!
How does that fit with the global warming narrative?
Anyone awake knows full well what’s going on … and it’s not global warming.
Who’s On First: NFLX or TGT?
Now that vending machine Carvana (CVNA), is out of the way, who’s next?
Partly as a result of economic decline and partly from the decision to take consumer spending elsewhere, Netflix and Target now appear ready to continue their implosion.
More on their technical chart conditions in the next update.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point® 